2 "Magnificent Seven" Stocks Down 19% and 25% You'll Wish You'd Bought on the Dip

Market Overview - The stock market has started 2025 on a shaky note, with the S&P 500 index down nearly 12% from its recent all-time high, following back-to-back annual gains of over 25% in 2023 and 2024, a rare occurrence in its history since 1957 [1] Investment Opportunities - The recent market sell-off presents a unique opportunity for investors to acquire high-quality stocks at discounted prices, particularly focusing on the "Magnificent Seven" stocks, which have a combined value of $14.3 trillion [2] Microsoft Analysis - Microsoft has invested approximately$14 billion in OpenAI since 2019 to enhance its AI capabilities, leading to the development of its AI assistant, Copilot, integrated into various software products [3][4] - Organizations that adopted Copilot for Microsoft 365 have expanded their licenses tenfold, with usage increasing by 60% in just three months [5] - Microsoft's Azure cloud platform reported a 157% year-over-year revenue growth in AI services during the second quarter, contributing 13 percentage points to the overall 31% revenue growth of Azure [6][7] - Microsoft stock is currently trading at a P/E ratio of 30.2, representing an 8.9% discount to its 10-year average P/E ratio of 33.2, marking a rare buying opportunity [8][9] Amazon Analysis - Amazon, the largest e-commerce company, also leads in the cloud computing sector with its AWS platform, which is larger than Microsoft Azure by revenue [10] - AWS has developed its own data center chips, Trainium and Inferentia, which can reduce costs for developers by up to 40%, and offers a platform called Bedrock with over 100 ready-made LLMs [11][12] - Amazon's virtual assistant "Q" embedded in AWS helps businesses identify trends and accelerate software development, enhancing productivity across various roles [13] - In 2024, Amazon generated $637.9 billion in total revenue, with AWS contributing$107.5 billion and accounting for 58% of the company's operating income [14] - Amazon's EPS increased by 90% in 2024, resulting in a P/E ratio of around 32, the lowest valuation since 2009, indicating a potential buying opportunity [15][16][17]